The actual truth about development

Tuesday

Jun 13, 2017 at 10:50 AMJun 13, 2017 at 10:50 AM

Joseph W. BradyContributed Content

In a May 9 op-ed published in the Review entitled, "The Sobering Truth About Development," Angela Valles appears to assign blame for most of the High Desert’s social and economic problems to residential developers. Her opinion piece attributes a range of problems, including high crime, deteriorating infrastructure, overcrowded streets, the proliferation of Section 8 housing and even the water shortage to the avarice of home builders seeking to maximize their profits at the expense of High Desert communities.

Among Valles’ claims are that residential developers secure “breaks” on infrastructure requirements in exchange for campaign contributions; that developers “live down the hill in beautiful communities” while reaping the profits from desecrating High Desert cities and towns and that developers are only interested in building “cookie-cutter houses catering to lower income residents.”

These assertions have little basis in reality. I am writing to set the record straight with the actual truth about development.

To begin with, I am unaware of any builder who has ever received a reduction in their requirement to build roads, sidewalks, lights and parks because they may have attended a councilmember's, mayor’s, assembly member's or county supervisor’s fundraiser. If Valles has any such awareness, she did not choose to share such examples with her readers. Building officials are very clear about their requirements, and those within the building industry understand and often welcome such requirements in the belief that they enhance the quality of residential development projects.

Valles’ assertion that all High Desert residential developers live “down the hill” is also without merit.

In fact, many home builders at one time lived in the High Desert region and were very much a part of our community, including Joe Watson, Donald Brown, Roy Vance, Joe Faherty, David Faylor, Todd Tatum and other past members of the High Desert Construction Industry Association. More recently, as the High Desert residential market slowly recovers from the Great Recession, new housing starts are comprised primarily of small infill projects initiated by local builders and developers.

The notion that developers are interested only in building homes catering to low-income residents is belied by the existence of high-quality residential projects throughout the region, including Stonebrook Estates and Jess Ranch — in Valles’ hometown of Apple Valley and my own community of Spring Valley Lake. While she is correct that the High Desert has experienced an enormous influx of crime, Section 8 housing and neighborhood deterioration, the causes of these problems, are multiple and have little if anything to do with residential developers.

The most important contributing factors include the 2008 recession, which resulted from lax lending standards leading to massive foreclosures (nearly 25,000 according to Inland Empire economist John Husing), many of which were subsequently converted to Section 8 units by absentee landlords; the 2011 passage of AB 109 (Public Safety Realignment), which reduced periods of incarceration and shifted thousands of state inmates to overcrowded county facilities who were, in turn, released to low-cost communities including the High Desert; and Propositions 47 (2014) and 57 (2016), which converted many “non-violent” felonies, including drug and property offenses to misdemeanors and increased credit for time served, releasing even more criminals onto our streets. The combination of a recession-induced expansion in the supply of government-subsidized housing with an influx of crime-prone individuals caused by disastrous changes in state criminal justice policy is the main cause of the High Desert’s recent increase in the social problems that Valles appears to attribute solely to the greed of residential developers.

The solution to these problems is more, not less development. Residential development creates jobs in the construction, finance, insurance, real estate, home improvements, retail, hotel and restaurant industries which, in turn, creates multiplier effects throughout the entire regional economy. The total direct impact from new home construction in San Bernardino County was $671 million in 2016, according to Hanley-Wood Real Estate Economics. After being overbuilt from 2009-2015 the county real estate market is now underbuilt and is projected to remain so for the foreseeable future. By 2019, Hanley-Wood estimates that the county will have an undersupply of 65,000 homes, representing $2 billion in untapped economic opportunity. Here in the High Desert, 470 residential building permits were issued in our five incorporated cities in 2016, up from a low of 193 in 2012 but still less than 10 percent of the peak year of 2005 in which nearly 6,500 permits were issued.

In addition to its positive economic impacts, new home construction and the home ownership that results from it have social benefits as well. A new study by California State University, San Bernardino concludes that counties with high homeownership rates have higher rates of high school graduation, lower crime and reduced poverty rates. Contrary to contributing to the deterioration of communities, as suggested by Valles, residential construction is actually a positive contributor to the economic and social vitality of communities.

If we are going to successfully address the current and growing housing shortage, we will need to induce investors and developers to take the risk of building homes in the High Desert. Wise investors read local newspapers and take into consideration the statements of opinion leaders in deciding whether to build in an area. They are unlikely to be encouraged by individuals seeking to make villains of the very people we need to help our communities to prosper once again.

— Joseph W. Brady is the president of The Bradco Companies, and a trustee of the Board of Trustees at Victor Valley Community College District.